Couples urged to shop around as mortgage protection premiums fall

By Charlie Weston Personal Finance Editor
Wednesday May 25 2011

COUPLES can save up to €126 a year on their mortgage protection premiums by seeking out a better deal, according to the National Consumer Agency.
Mortgage protection and life insurance premium rates have fallen dramatically recently due to fierce competition among insurers and the fact that people are living longer, so insurers are having to pay out less often.
Now a new survey by the state agency has found massive variations in premium rates for life insurance and mortgage protection.
Premiums range from €53 a month to €76 a month for a couple who smoke and want to take out mortgage protection insurance on a €380,000 home loan.
Difference
Over a year, the difference works out at €274. But over the 35-year term of the mortgage the difference climbs to more than €9,500.
Non-smokers can save €126 a year by seeking out the best rates in the market.
The couple in this example have joint mortgage protection cover, which means the policy will pay out the sum insured if one of them dies.
Huge savings can also be made on life insurance.
A couple who smoke could be over-paying by €335 a year by failing to get the lowest premium in the market, the National Consumer Agency research found.
The survey examined the cost of term-life and mortgage protection cover against a range of different consumer profiles.
Maria Hurley of the consumer agency said the research also found that smokers who kick the habit for at least a year can save up to €590 annually for life insurance by getting the best deal.
Chief executive of the Irish Brokers' Association Ciaran Phelan said households typically phone a couple of insurance companies every few years, identify the best deal at that time and just assume that the same provider will continue to offer the best price. But this is wrong.
"Prices change dramatically all the time, so it pays to let a broker shop the market and get the best cover at the most affordable price," he said.
Most consumers need mortgage protection and term assurance to replace their income in the event of their untimely death. A 40-year-old couple spending €1,000 per annum can typically afford €200,000 to €300,000 in cover.
With increasing longevity resulting in falling insurance prices over the last few years, a saving of at least €200 could be achieved, he said.
- Charlie Weston Personal Finance Editor
Irish Independent

Where did that €16,000 come from?

We had a client who was totally focused on keeping his business trading, he wanted to make sure he was properly covered in terms of life insurance, he didn't want to leave his wife and kids in the lurch!
When he looked at his policies he knew he could save a few Euro but didn't think it was worth the hassle, he had 3 seperate policies with different terms and thought he would be better off putting his time towards running his business than chasing savings on his policies.

When carrying out an investment review for him we convinced him to let us review his life cover, guess what, when we added all the savings, he would be €16,300 off over the term of the policies, while keeping the same level of cover for €2,000 less p.a. To say he was shocked is an    understatement, as he said himself the work he would have to put in to make €16k "didn't bear thinking about"!

Looking after the pennies!

In these "trying" times we are all looking at ways to make our hard earned Euro go further, these days our clients are taking the time to review their house and motor insurances to make sure you are getting the best value. However what we have found is that they often ignore their most important asset, themselves.
We have started a campaign to help our clients get the best value in terms of life cover, this does not only mean the lowest price but also the best cover for them. As we say in here "look after the pennies and the pounds will look after themselves", a bit old school I know but it makes the point.
Mount Street can be contacted at - 1890 876 200 or by email at info@mount-street.com.